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Rutgers Athletics $265M in Debt: Governor says "Not Sustainable"

Between 2023 and 2035, Rutgers is projected to make $600 Million Plus in B1G revenues alone. That does not count internally generated revenues from sold out SHIs and RACs during in those years.

Servicing any debt when interest rates are so low is really cheap. It's almost stupid not to invest B1G time right now via debt. AND, there will be be more good debt 😆 when the new Football Facility is built in a few years and when the RAC renovat is on is done as well.
 
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Between 2023 and 2035, Rutgers is projected to make $600 Million Plus in B1G revenues alone. That does not count internally generated revenues from sold out SHIs and RACs during in those years.

Servicing any debt when interest rates are so low is really cheap. It's almost stupid not to invest B1G time right now via debt. AND, there will be be more good debt 😆 when the new Football Facility is built in a few years and when the RAC renovat is on is done as well.
Is that enough?
 
The thing that is unsettling is our reliance on others.

4 things must occur to keep things going
1. Programs continue to win (not reliant)
2. Schiano stays
3. Pike stays
4. Top schools stay in B1G and don’t hold smaller schools ransom for revenue
 
Between 2023 and 2035, Rutgers is projected to make $600 Million Plus in B1G revenues alone. That does not count internally generated revenues from sold out SHIs and RACs during in those years.

Servicing any debt when interest rates are so low is really cheap. It's almost stupid not to invest B1G time right now via debt. AND, there will be be more good debt 😆 when the new Football Facility is built in a few years and when the RAC renovat is on is done as well.

Don’t disagree, but one issue is that ongoing investment also continues into perpetuity. In an arms race, there is never an opportunity to be satisfied with what you’ve built. Just guessing, but I think in the rosiest scenario the deficit stops growing and we can match sources and uses using big ten cash flows, but I don’t see an opportunity to meaningfully de-leverage the athletics department.
 
Don’t disagree, but one issue is that ongoing investment also continues into perpetuity. In an arms race, there is never an opportunity to be satisfied with what you’ve built. Just guessing, but I think in the rosiest scenario the deficit stops growing and we can match sources and uses using big ten cash flows, but I don’t see an opportunity to meaningfully de-leverage the athletics department.
What if you realize this is true and then you add in NIL contracts that makes competing even harder. Your highly compensated coaches know it too. You and your coaches come to the realization it isn’t feasible to continue.

unfortunately that is my base case how this ultimately goes down. I will enjoy it while it lasts and hope I am wrong.
 
What if you realize this is true and then you add in NIL contracts that makes competing even harder. Your highly compensated coaches know it too. You and your coaches come to the realization it isn’t feasible to continue.

unfortunately that is my base case how this ultimately goes down. I will enjoy it while it lasts and hope I am wrong.
Doom and Gloom
 
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Doom and Gloom
Was it doom and gloom being a Pirates fan in the 90s watching your OF of Bonilla, Van Slyke and Bonds watching 3 consecutive years you lose 1 to free agency.

it was reality.

If you look at our financial situation PLUS changes in the transfer rules PLUS new NIL world PLUS knowing what we were without Schiano and Pike and conclude that things will be fine you aren’t being realistic.

It doesn’t mean you can’t enjoy the good times now.
 
We need to start doing what other schools have been doing for years. Have some academic classes in athletic facilities so the building and maintenance of the structure is taken off the athletic department ledger. We also need to have more events at our facilities to bring in revenue. For example, have we reached out to the New Jersey Generals ?
 
It's very disturbing that someone high up in a public university is cooking the books to justify the incurring of huge debts and deficits. Why was this information not made public until now?
 
Was it doom and gloom being a Pirates fan in the 90s watching your OF of Bonilla, Van Slyke and Bonds watching 3 consecutive years you lose 1 to free agency.

it was reality.

If you look at our financial situation PLUS changes in the transfer rules PLUS new NIL world PLUS knowing what we were without Schiano and Pike and conclude that things will be fine you aren’t being realistic.

It doesn’t mean you can’t enjoy the good times now.
Look at the bright side, the Mets will be paying Bonilla's contract for the next 14 years until he turns age 72.
 
If i were a Seton Hall fan I don't think I would be happy to hear the state of NJ (and indirectly me) was footing so much of the athletic department bill.

I am not a SHU fan so I don't care.
 
Look at the bright side, the Mets will be paying Bonilla's contract for the next 14 years until he turns age 72.
I thoight I saw an analysis based on a realistic interest rate it was still advatangeous to the Mets. I could be wrong
 
The state of New Jersey footed the bill for a Medical School for Seton Hall, a PRIVATE University.
 
The state of New Jersey footed the bill for a Medical School for Seton Hall, a PRIVATE University.
Seton Hall does not have a Medical School. It almost stupidly purchased a Medical School that it could not afford.
 
There is no cooking of the books and if I am due a payment and I receive an advance on what I am due, it is not a loan.

A loan is when you literally don't have the money and you are borrowing from an entity that isn't paying you (the B1G).

I really enjoy these articles because it means you are doing things and are on the map. No one is writing about a bunch of other schools and universities that aren't going to survive this pandemic.

And somehow the article neglected to mention that we are in the middle of a pandemic, with no revenue from attendance, ticket sales etc.....if I showed fans a PSU article on how much lost revenue they have from just 1 season of no football, heads would spin.

The difference between PSU and RU is PSU sells 80K season tickets and has been cashing B1G checks for almost 3 decades. They have tons of revenue and have built everything on their campuses based on football revenue. A number of debt is not an issue if you have a revenue stream to offset it.....it won't be eliminated overnight, but RU will be fine in 10 years. Let's revisit this conversation in 2030.....
 
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Batts, I was told the state of New Jersey was going to give them money for a Medical School with Hackensack at the old Hoffmann LaRoche site. Can’t say I know (or care) what all the details were, but at some point Hackensack took over the whole thing. If state money went to the Hackensack system , but the school is for Seton Hall students that’s not ok. If neither Hackensack or Seton Hall ended up getting any state funds, then the two can do whatever they want.
 
If i were a Seton Hall fan I don't think I would be happy to hear the state of NJ (and indirectly me) was footing so much of the athletic department bill.

I am not a SHU fan so I don't care.

Any SHU fan (or other state resident) who says "but my taxes" when talking about Rutgers Athletics is completely out of their realm.

Athletics is a minimal amount of the annual Rutgers budget.
Of that budget, a shockingly small amount comes from state appropriations.

The trickle down from "tax money" to "Rutgers Football" is approximately single digit dollars per tax payer.
 
Was it doom and gloom being a Pirates fan in the 90s watching your OF of Bonilla, Van Slyke and Bonds watching 3 consecutive years you lose 1 to free agency.

it was reality.

If you look at our financial situation PLUS changes in the transfer rules PLUS new NIL world PLUS knowing what we were without Schiano and Pike and conclude that things will be fine you aren’t being realistic.

It doesn’t mean you can’t enjoy the good times now.

Is that enough?
I just used that as a quick example. In the other thread on the free football board. A guy took an in depth look at the debt for facilities and most of it was due by 2048, some by 2035.

So, if you look at B1G money only from 2025 to 2048 using a REALLY REALLY lowball average of $70 million per year for 20 years . You are talking about $1.7 Billion. The real number is OVER $2 Billion. A debt of $250 million looks small compared to $2 Billion Plus.

Again, that money over 20 years does not include internally generated revenues.
 
Nick,It is less than a dollar per New Jerseyan each year from what several have mentioned on the football board.—Where were these “journalists” when we got socked with $ 600 million of debt from the fraud and mismanagement that came with UMDNJ. Where are their articles about Trenton ( both parties) year after year making New Jersey last in its’ support of our public colleges. Other states come up with thousands and thousands of dollars in aid to New Jersey students and Rutgers and our other state colleges have nickels to assist.
 
I just used that as a quick example. In the other thread on the free football board. A guy took an in depth look at the debt for facilities and most of it was due by 2048, some by 2035.

So, if you look at B1G money only from 2025 to 2048 using a REALLY REALLY lowball average of $70 million per year for 20 years . You are talking about $1.7 Billion. The real number is OVER $2 Billion. A debt of $250 million looks small compared to $2 Billion Plus.

Again, that money over 20 years does not include internally generated revenues.
Inflation for coaching salaries will have Schiano making 1 billion in 2048.
 
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Any SHU fan (or other state resident) who says "but my taxes" when talking about Rutgers Athletics is completely out of their realm.

Athletics is a minimal amount of the annual Rutgers budget.
Of that budget, a shockingly small amount comes from state appropriations.

The trickle down from "tax money" to "Rutgers Football" is approximately single digit dollars per tax payer.
Imagine using that argument when talking about money for organizations that aren't against abortions.

But point well taken!
 
There is no cooking of the books and if I am due a payment and I receive an advance on what I am due, it is not a loan.

A loan is when you literally don't have the money and you are borrowing from an entity that isn't paying you (the B1G).

I really enjoy these articles because it means you are doing things and are on the map. No one is writing about a bunch of other schools and universities that aren't going to survive this pandemic.

And somehow the article neglected to mention that we are in the middle of a pandemic, with no revenue from attendance, ticket sales etc.....if I showed fans a PSU article on how much lost revenue they have from just 1 season of no football, heads would spin.

The difference between PSU and RU is PSU sells 80K season tickets and has been cashing B1G checks for almost 3 decades. They have tons of revenue and have built everything on their campuses based on football revenue. A number of debt is not an issue if you have a revenue stream to offset it.....it won't be eliminated overnight, but RU will be fine in 10 years. Let's revisit this conversation in 2030..

The fact remains that Rutgers hid the real numbers from the public and also hid the fact that Athletic Department is running at a huge annual loss. Someone in the Administration did not want the public to know of the magnitude of the deficit facing its Athletic Department. If Rutgers' AD continuously borrows (or receives advances) from its Big allotment and receives large loans from the University, how is it ever going to break even? Do you think that ticket sales from football and men's basketball is going to erase the current and ever growing 265 million dollar debt in the face of rising costs?
 
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Inflation for coaching salaries will have Schiano making 1 billion in 2048.
but that might be on the low end of P-5 HC pay scale. even with a 100,000 seat stadium filled tyo capacity 6 of the 7 home games.
The two empty deats te game not sold outr will have the anti sports crowd demanding the stadium be torn down and used for a shopping mall
Any time money is an issue, RU fans look for the worst case scenario and not possible ways it will be bettor.
 
but that might be on the low end of P-5 HC pay scale. even with a 100,000 seat stadium filled tyo capacity 6 of the 7 home games.
The two empty deats te game not sold outr will have the anti sports crowd demanding the stadium be torn down and used for a shopping mall
Any time money is an issue, RU fans look for the worst case scenario and not possible ways it will be bettor.
It’s what we do.
 
The fact remains that Rutgers hid the real numbers from the public and also hid the fact that Athletic Department is running at a huge annual loss. Someone in the Administration did not want the public to know of the magnitude of the deficit facing its Athletic Department. If Rutgers' AD continuously borrows (or receives advances) from its Big allotment and receives large loans from the University, how is it ever going to break even? Do you think that ticket sales from football and men's basketball is going to erase the current and ever growing 265 million dollar debt in the face of rising costs?

Let's start with basics....

If I am due to be paid 300M over the next 7 years and I ask for 100M to be paid to me in the next 2 years, how is that considered a loan?? I am going to receive that money over a certain timeframe. If I receive an advance on what I am supposed to receive, it is not a "loan".

If that concept was in the article, then a real discussion can take place.

And no I never said ticket sales would erase a deficit, I am saying the article convinently leaves out the fact that all schools/universities are in the midst of a pandemic and the normal revenue streams are or have been interrupted. Those are two very specific items not mentioned in the article.

The obvious and most important item is acting as if RU is somehow isolated from a loss of revenue or potential revenue. There are multiple articles about how all 14 SEC schools were paid money directly by the league, to offset the loss of revenue from not having access to the normal revenue stream because of the pandemic. I am sure that those schools are not crying about receiving that money.

Just be certain of 1 thing......RU has a path towards reducing its numbers and this is the only time in the schools history of major college sports, where it has a true, legitimate revenue stream....not the nonsense of the A-10, Big East or the short stay in the AAC....the B1G is a league and conference that provides a path to correct something, that ultimately could not be fixed.

OR, you can read about the State of Connecticut if you want a legitimate crisis or budget issues.....UConn is an actual and legitimate story where there is no major conference that's going to salvage their financial woes. And they will eventually either write off the debt or push that debt into future years.
 
NJH,

How permanent is being in the B1G? How permanent is equal revenue distribution? How permanent are teams staying in B1G?

If B1G disbanded what type of revenue could we expect.
 
What would happen if Netflix wants to get in to live sports? Does a combined equity and debt offering raising $5 billion.

It intends on offering $500,000,000 to 10 schools. Schools have to go independent for football and over a 5 year period have an exclusive right to broadcast all games.

There will be commercials, but a marketing agency will handle with 90% of the incremental revenue raised going to athletes as they will be marketing products.

Would schools like Ohio State, Notre Dame, Michigan take that deal?
 
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What would happen if Netflix wants to get in to live sports? Does a combined equity and debt offering raising $5 billion.

It intends on offering $500,000,000 to 10 schools. Schools have to go independent for football and over a 5 year period have an exclusive right to broadcast all games.

Would schools like Ohio State, Notre Dame, Michigan take that deal?
That means OSU would go from making $75 million a year to $50 million per year. So, No. They don't take that deal.

Plus, they lose their academic partnership with AAC/B1G schools.
 
I don't think this looks too good. RU raiding the coffers of the rest of university budget to keep pace with BIG 10 athletics. Robbing Peter to pay Paul. And top budget brass trying to conceal it. Bad signs all around.
 
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It's very disturbing that someone high up in a public university is cooking the books to justify the incurring of huge debts and deficits. Why was this information not made public until now?
It happened at Maryland. It wasn't as bad as what appears to be happening at RU tho.

They ended up cutting seven sports and joining the B1G for a payday to get out of debt.

Maryland's sneaky AD reported balanced budgets but did so by drawing down its reserve funds.

The president announced his retirement and the AD jumped to a job at NCST before Maryland's new president was hired and learned about her Enron accounting tactics and fire her.
 
Goodbye Big 10?
Posted this on Football Board. This is an important issue for Rutgers, but not something that contrived.

Good analysis on Rutgers Rant where Sarge, Politi and Kratch note that this is a non-story and old in some ways. They noted that this was all disclosed earlier. Only thing that changed is that Holloway is considering forgiving the University loan to the athletic department. That may have caused an uproar with some faculty members who have now bubbled this up to try to be a "new story." This option to forgive the loan did not seem too surprising to them - they seemed to expect that would happen. Folks can take their own listen to it on the podcast from this week and draw their own conclusions. That is what I took away from it.
 
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